Indonesian Rupiah Weakens Against US Dollar Amidst Economic Recovery Hopes

The Indonesian Rupiah showed a weakening trend against the US Dollar in Monday morning trading on July 20, 2026, though its movement remained within the 17,900s range. Analysts had predicted the Rupiah would move between Rp 17,870 and Rp 17,930 against the US Dollar on Monday. Citing Antara, the Rupiah exchange rate depreciated by 56 points or 0.31% to Rp 17,977 per US Dollar compared to the previous closing level of Rp 17,921 per US Dollar. Previously, Economic, Currency, and Commodity Observer Ibrahim Assuaibi predicted that the Rupiah had the potential to end trading in positive territory on Monday, July 20, 2026, despite market volatility. "For next Monday's trading, the Rupiah currency will be volatile but is expected to close higher in the range of Rp 17,870 - Rp 17,930 per US Dollar," Ibrahim stated in his explanation on Saturday, July 18, 2026. He noted that the Rupiah's movement would continue to be influenced by external sentiment developments, particularly the dynamics of the Middle East conflict impacting global oil prices, as well as market expectations regarding the Federal Reserve's (The Fed) interest rate policy. Additionally, market participants will be closely watching various global economic data that could affect capital flows into emerging countries, including Indonesia. For the week's trading, Ibrahim projected the Rupiah exchange rate to move within a fairly wide range of Rp 17,750 to Rp 18,050 per US Dollar. Meanwhile, from the domestic side, positive sentiment emerged from the results of Bank Indonesia's (BI) Business Activity Survey (SKDU), which indicated an increase in business activity in the second quarter of 2026. BI reported that the Weighted Net Balance (SBT) reached 12.97%, higher than the previous quarter's 10.11%. This increase was driven by improved performance in the agriculture, forestry, and fishery sectors, construction, mining, and accommodation and food service provision, coinciding with the momentum of National Religious Holidays (HBKN) and the school holiday season. In line with this, the utilized production capacity also increased to 73.8% from 73.33% previously. BI also noted that the conditions of liquidity, profitability, and access to financing for businesses remained in good condition. Nevertheless, businesses anticipate that activity in the third quarter of 2026 will slow down slightly with an SBT of 11.75%. The slowdown is expected to be limited as several sectors, such as manufacturing, trade, construction, and mining, are still projected to record growth. "In another survey, Bank Indonesia's Prompt Manufacturing Index (PMI BI) recorded the performance of the manufacturing industry at 51.43% in the second quarter of 2026, lower than the previous period of 52.03%. BI noted that the PMI BI was driven by expansion (>50%) in several components, such as Production Volume (53.81%), Finished Goods Inventory Volume (53.00%), and Total Order Volume (52.77%)," he said. Read the latest and most trusted news at Berita Liputan6.